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But Wait, There's More
Wrap Up of Microsoft's Other Noteworthy TechEd 2004 Announcements
In addition to the announcements of roadmaps and extended support at the TechEd 2004 show in San Diego, Microsoft made a number of other noteworthy announcements. First, it killed off the future "Kodiak" version of Exchange Server, which is the kicker to Exchange Server 2003, formerly known as "Titanium." Dave Thompson, VP in charge of the Exchange Server group at Microsoft, said that Microsoft would be weaving in new features and adding 64-bit support to the current Exchange Server instead. Kodiak was to store email data in the same SQL format as the future "Yukon" SQL Server 2005 format, and while Microsoft says it will support this, exactly when seems to be unclear. Last week, Microsoft launched Service Pack 1 for Exchange Server abd debuted its Intelligent Message Filter (IMF). Microsoft is offering IMF to any Exchange Server 2003 customer, not just to those under a Software Assurance contract as it had said it would in November 2003 when it put out a beta of the IMF product. Exchange Server 2003 also got Service Pack 1, and the main enhancement there is improved APIs for virus scanning of emails. SP1 also has features to help customers running multiple Exchange Server 5.5 sites onto fewer instances of Exchange Server 2003.
Microsoft also put out a new Feature Pack for Windows Storage Server 2003, the product that is used to make network-attached storage (NAS) disk arrays out of Windows servers. The FP allows Storage Server to house Exchange Server datasets, which tend to like SAN or direct-attached storage because of the higher bandwidth and lower latency.
Finally, Microsoft said that it was on track with the Yukon SQL Server 2005 database and would deliver it in the first half of 2005 and that it would include native encryption support inside the database. However, Paul Flessner, VP of the server platform division, said that after Yukon Beta 2 comes out in a few weeks, the company had decided to put out a third beta towards the end of the year to make sure Yukon is rock-solid.
Big Hack Attacks Doubled At Financial Services Firms in 2004
If you think your IT job is tough, try working in the IT departments of the world's financial services companies. According to a survey performed by accountancy Deloitte & Touche, hack attacks against financial services companies more than doubled this year, compared with a study done this time last year. The company's "2004 Global Security Survey" indicates that 83 percent of the financial institutions that responded have had their IT systems compromised in the past 12 months, compared with 39 percent this time last year. Some 40 percent of those who were hit said that they sustained financial losses due to the attacks.
Ironically (unless you read Dilbert), of the 100 big financial firms polled, more than a quarter said they were not spending any more on IT security in 2004 than they did in 2003, and 10 percent of the companies actually cut their security budgets. Even more shocking was the finding that only 87 percent of respondents claim to have fully capable antivirus countermeasures, down from 96 percent in 2003. Not a winning strategy, clearly. But, hey, it's your money they are playing with, right?
IBM, SSA Global Ally to Attack the Midrange
IBM and SSA Global have renewed their allegiances and made a commitment to attack the midrange together. As has happened in other IBM alliances, SSA has agreed to standardize on IBM's middleware stack, including the WebSphere Application Server, the WebSphere Portal, and the DB2 database, in exchange for assistance from IBM as it tries to sell its software on iSeries, pSeries, xSeries, and zSeries machines. IBM Global Services and SSA Global plan to offer joint implementation and consulting services. By standardizing on IBM middleware, SSA Global can help to meld together many of the disparate applications the company has acquired over the past two years.
IDC Expects Software Subscriptions to Grow Steadily
Software analysts at IDC have just released a forecast for the market for subscription-based software licensing, which many vendors believe is going to be their salvation from the horrors of constantly trying to upgrade their installed bases. According to the IDC report, the company expects software subscriptions to grow at a compound annual growth rate of 16.6 percent from 2003 to 2008, reaching $43 billion worldwide by 2008. Perpetual software licenses will shrink modestly at a rate of 0.3 percent annually over the same timeframe, according to the report.
But IDC may be underestimating how big the seismic shift will be away from perpetual licensing and toward subscription licensing. People are sick of managing their licenses and upgrading their software, and vendors are sick of selling their products this way. If vendors come up with the right mechanisms and pricing to properly do subscription-based software licensing, the shifts could be a lot larger than IDC expects. There are plenty of software upstarts that are going to try to make this happen, and they may fail, just as most companies that tried to sell software under the application service provider model in the late 1990s and early 2000s did. This time around, they may just get it right.
ERP Spending to Grow in 2004
The global market for ERP applications is expected to grow by nearly 7 percent this year, according to a new study by IT analyst IDC. The Massachusetts firm said last week that $26.7 billion will be spent on ERP software this year, up from the nearly $25 billion spent in 2003. And by 2008, IDC said, ERP spending will increase by almost 35 percent, to $36 billion. Considering that many people thought ERP was dead, in lieu of the new era of e-business, just a few years ago, this has to be very promising news for ERP vendors. IDC also said market consolidation will continue this year, although it won't produce any jaw-dropping numbers. The top-10 ERP vendors secured 46 percent of the market in 2003, compared with 44.5 percent in 2002 and 42 percent in 2001, IDC said. Though the firm said it released a list of the top-10 ERP vendors, the press release only listed the top five: SAP, PeopleSoft, Oracle, Microsoft, and Sage. IDC had not provided the rest of the top 10 list at press time, so we decided to take a stab at numbers six through 10 ourselves and came up with Geac, with $456 million in fiscal year 2003 revenue, Intentia, with $384 million (2927 million SEK), Lawson Software, with $344 million, IBS, with $315 million (2,400 million SEK), and SSA Global, with $285.4 million. (These revenue figures are for the companies' fiscal 2003 years, which vary and therefore aren't direct comparisons, but this gives you an idea of how the rest of the ERP market shapes up.)
Gartner Says Database Market Rebounded in 2003
The fiercely competitive database market has not gotten any easier to be in, but the market did, according to Gartner, manage to grow a smidgen in 2003. Gartner says that the overall relational database market grew by 5.1 percent in 2003, to $7.1 billion, which is a big improvement over the 6 percent decline database makers suffered through in 2002, when they only sold $6.7 billion in new licenses. (These figures do not include services and support revenues or sales of flat file database management systems that are still sold by IBM, Computer Associates, and a few other companies.)
Gartner pegged IBM as the number-one relational database supplier of new license sales, which includes a lot of mainframe shops that pay for software on a monthly basis; they effectively book a new sale every month, to Gartner's thinking. IBM had $2.5 billion in database sales, up 4.9 percent. Rival Oracle, which dominates the Unix database market and has a healthy share of the Windows and Linux markets, had new license sales of $2.3 billion, according to Gartner, up 2.4 percent. Microsoft booked $1.3 billion in relational database sales in 2003, up 11.1 percent, and giving it 47 percent of the Windows database market, which was up 3.8 percent, to $2.8 billion. Sales of databases on Unix platforms declined by 5.9 percent, to $2.34 billion; Oracle had 57.4 percent of this market. Linux database sales were up 158 percent, to $299 million, and Oracle nearly quadrupled its sales (thanks to Oracle 9i Real Application Clusters, no doubt) and got 69.1 percent of the Linux database market.
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